The General Services Administration headquarters building in Washington, D.C. (Staff file photo)
Severe budget cuts are forcing the General Services Administration to abandon indefinitely further renovations and a planned expansion of its headquarters in Washington.
Employees who have been working in temporary leased offices during the renovation will move back to the headquarters building by February 2013 — 18 months ahead of the original move-in date — according to an Oct. 5 email distributed to GSA employees by Emily Barocas, GSA's associate administrator for communications.
Barocas said the earlier relocation will save money and reuniting employees at headquarters will improve the way the agency operates. But she added "there is going to be some disruption" associated with the relocation, and she labeled the upcoming move the next phase of GSA's "extreme challenge."
Employees were also notified of the curtailed plans with a video on GSA Administrator Martha Johnson's internal blog.
The headquarters renovation project had been divided into two phases, with $162 million obligated for the first phase. GSA has estimated the total project to cost between $200 million and $250 million.
Phase 1 renovated most of the existing 700,000-square-foot building, while Phase 2 would have added more than 105,000 square feet of space.
Barocas said that by ending three current leases early and moving employees back to headquarters, the agency will save $28 million annually in leasing and operating costs.
GSA plans to begin Phase 2 of the renovations when it gets funding for the project.
But it appears that is not likely to happen anytime soon.
GSA is not expected to request money for the next phase of its headquarters renovation because it has other higher-priority projects to complete, including the Food and Drug Administration's consolidation at White Oak, Md., and the Department of Homeland Security consolidation in Southeast Washington, according to a congressional aide who asked not to be named.
The agency has renovated about 70 percent of the building, according to the aide.
Budget cuts over the last year have sent the agency reeling, forcing GSA to postpone or cancel projects across the country and threatening GSA's ability to provide basic services for its federal tenants.
GSA saw its funding for new construction drop 91 percent from $894 million in fiscal 2010 to $82 million in fiscal 2011, and saw a 32 percent cut to its renovation budget from $414 million to $280 million over the same period.
Proposals for fiscal 2012 are bleaker: The House Appropriations Committee provided no money for new construction and $280 million for repairs. The Senate legislation provides $56 million for repairs and $280 million for new construction.
The federal building fund — the revolving pool of funding GSA uses to maintain property, pay rent and manage its construction and renovation portfolio — was cut from $9.1 billion in 2010 to $7.6 billion in 2011.
Legislation passed by the House would cut it still further, to $7.2 billion, the lowest level since 2007.
Before the renovation, there were 2,000 employees working at GSA headquarters. But GSA had planned to relocate 6,000 employees — the original 2,000, plus 4,000 who work at four leased offices around the Washington area — to the headquarters after the renovations and expansion.
GSA is still determining how many workers can fit at the headquarters without the planned expansion.
John Hanley, president of the Council of GSA Locals, part of the National Federation of Federal Employees, said the agency should never have started a project it was not certain of finishing.
He said GSA has not been open about what the finished space will look like, and he is worried that a partially renovated space will not be a good work environment.
"I fear they are just going to stuff the employees into tiny, tiny pens where they won't be able to get any work done," Hanley said.
The union had signed an agreement that said employees would be at the temporary leased offices for five years — which has been cut short by GSA's decision to end renovations early.
If GSA resumes the renovations in future years, it will need to move employees out again, adding to the total costs and causing uncertainty in the workforce, Hanley said.
GSA is running low on funding and will start to see significant problems in maintaining buildings and paying rent in the near future if Congress does not provide additional appropriations, according to the aide.
Meanwhile, GSA's portfolio of space has increased from 350 million square feet in 2007 to more than 370 million square feet today.